HSBC Global Viewpoint The Macro Brief – Globetrotting
Jun 13, 2025
In this engaging discussion, Janet Henry, Global Chief Economist, dives into the implications of tariff uncertainties on economic data. She highlights how trade dynamics are affecting smaller businesses and contrasts resilient economic indicators with declining consumer confidence in the U.S. The conversation touches on Moody's recent downgrade of U.S. debt, raising alarms about fiscal health. Janet also assesses global economic trends from Europe to Asia, focusing on investments and shifting market strategies, particularly regarding Gulf economies.
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Markets Price In Tariff Uncertainty
- Markets have somewhat priced in 10% tariffs, treating them as negotiation tactics rather than shocks.
- Smaller US companies may feel the tariff impact more than large S&P 500 firms, with effects delayed in economic data.
US Data Signals Mixed Strength
- US hard data like payrolls and wage growth remain resilient despite tumbling soft indicators.
- Some cracks are emerging, such as drops in household employment and rising jobless claims, indicating a volatile data environment ahead.
US Debt Downgrade Reflects Fiscal Worries
- Moody's downgrade of US debt reflects concerns over fiscal dynamics and the impact of new spending and tax cuts.
- Rising debt-to-GDP ratio and projected higher interest spending worry investors despite the US being the world’s reserve currency.